Global supply chains are fragile, with limited resources available to produce lithium-ion batteries as the world continues to invest in electrification. Geopolitical tensions in the areas where critical materials like nickel, cobalt and graphite are commonly mined and processed are complicating the issue. And when one nation controls 99% of the battery-grade graphite supply, it’s time to take notice and try a new approach.
Consequently, the need for a locally sourced and produced energy solution has never been greater. Lithium-sulfur batteries can play a key role, to help countries regain energy independence and move toward a more sustainable future.
Global demand for batteries is increasing, particularly for high-performance batteries that power vehicles and other moving machines. This is driven largely by imperatives “to reduce climate change through electrification of mobility and the broader energy transition,” according to analysis by McKinsey. It found that the entire lithium-ion battery chain — mining through recycling — could grow by more than 30% a year between 2022 and 2030, reaching a value of more than $400 billion.
Two main battery types are at play. There’s the lithium-ion NMC (nickel, manganese and cobalt), and LFP (lithium-iron phosphate). NMC is the high-performance battery and costs more; LFP is the lower energy density and lower-cost option, so it’s starting to take more market share.
Today, a single country — China — dominates both battery types, and not just their manufacture. The country has spent the better part of 20 years quietly securing every spot in the supply chain, from owning the majority share of mines in the Congo that produce these minerals to owning those in Indonesia outright. It also owns the infrastructure for processing those minerals. Today, you can’t buy a battery for a vehicle or other high-performance applications that doesn’t go through China.
As a monopoly, that means China controls prices. And organizations try to build supply chains outside of China, prices drop dramatically — but then they can’t get into the market. Projects wind up getting defunded, which eliminates competition. The problem is that Chinese manufacturers are being subsidized through the government’s ownership of the entire raw material supply chain and battery supply chain. This is why the U.S. government is taking action with the Inflation Reduction Act and tariffs, and Europe and other nations are moving in the same direction.
The ability to store energy and move it around is incredibly valuable to any economy. Think about how many wars have been fought over oil. Energy is wealth. This is what most economies are built on.
Thus, energy security has become increasingly important. Batteries are becoming today’s oil, especially as the world transitions to a greener economy. But countries are trying to build this transition and (re)gain energy security in an environment where one country entirely owns and dominates the market, and this is setting countries up for a significant economic and national security risk.
The battery supply chain needs to be disrupted and diversified. It’s difficult for the U.S. and Europe to compete on manufacturing relative to the cost of labor, labor conditions and safety regulations, but it’s nearly impossible if their supply chains are dependent on a single country.
Although NMC and LFP, today’s leading battery chemistries, are primarily controlled by China, battery technology innovation is gaining significant momentum in the U.S. and other countries. Attempting to replicate the NMC and LFP supply chains is incredibly risky. What’s needed is a new approach — one that leans into battery technology that uses abundant and geographically distributed materials. This would give nations more opportunity and control of their electrification supply chains.
Lithium-sulfur batteries are one such emerging alternative — one that can be built using a simpler set of materials that are available everywhere. Lithium is widely distributed around the globe, which gives it enormous potential for local sourcing and development. And the emergence of direct lithium extraction methods means it can be sourced with a fraction of the carbon footprint.
As for sulfur, it is plentiful, readily accessible everywhere, and dirt cheap. Sulfur is a highly energy-dense material that doesn’t need to be mined. Lithium-sulfur batteries are viable for the mass market because they solve multiple pieces of the puzzle by delivering higher energy density, lighter weight, lower cost and localized supply chains.
For nations to achieve energy storage leadership and deliver clean energy abundance for the world, they must find new ground. And that new ground must eliminate energy storage’s dependence on these critical minerals. Not replicate. Eliminate.
Local sourcing of the materials and processes to make these alternative batteries puts companies and countries on the path to energy independence. And the sky’s the limit for what this future can deliver. Local sourcing points the way toward cheaper electric vehicles, drones that fly further, electrified trucking fleets and massive electrified industrial growth that protects the environment. With this approach, nations and companies can achieve energy security, economic growth and a cleaner future for every country, for decades to come.
Keith Norman is chief sustainability officer with Lyten.